The criminal side
Tax evasion is a federal felony, and it requires proof of a willful attempt to evade tax, typically shown through an affirmative act such as hiding income, keeping false books, or moving assets out of reach. Federal cases are investigated by IRS Criminal Investigation and prosecuted by the Justice Department. After a conviction, the court considers the federal sentencing guidelines, where the amount of tax loss is a major factor, along with the person's role, acceptance of responsibility, and other circumstances. Prison is possible, and so are probation, fines, and the costs of prosecution. Prosecutors may also bring related counts, such as filing a false return or failing to file, which carry their own ranges, and some cases are resolved by a plea to one of those.
Civil consequences on top
A criminal case does not end the tax bill. The IRS usually assesses the unpaid tax with interest, and it can add a civil fraud penalty calculated as a share of the underpayment attributable to fraud. Courts often order restitution of the tax loss as part of a criminal sentence, and the IRS can assess that restitution and collect it like tax. New York State can bring its own criminal and civil case for state taxes based on the same facts. For non-citizens, a tax offense involving fraud can be treated as an aggravated felony for immigration purposes when the loss is large enough, which carries serious removal consequences.
What affects the result
Much depends on decisions made before charges are filed. The calculation of tax loss is often disputed, and a careful reconstruction of income and deductions can change it. Whether you made statements to agents, and what they were, affects the defense. Courts and prosecutors often take into account whether the tax has been repaid before sentencing. In a first meeting we review what the government has requested, which returns and records exist, and any contact with investigators so far. Then we discuss whether early engagement with the prosecutor is in your interest, and what it would require.
